A couple of years ago, gift card reseller Giftcardrescue shut its doors and lots of sellers lost their money. Luckily for us, that site wasn’t used by most of our our readership. Unfortunately, a similar issue now cropped up closer to home: there are some serious payment issues with the TPM gift card buyer. TPM is an buyer many of our readers have used, some of whom are now left holding the bag.
Just a quick word before diving into the post. I was very reticent to write this post for two reasons. First, TPM sent out an email indicating some internal business issues, and it made sense to give them time. Second, TPM never advertised their business publicly and it doesn’t seem right to badmouth a private small business on a public forum, especially given we don’t have all the facts.
The flip side is that TPM is a buyer who was very popular with our readership and lots of people were asking about it. At this point, it’s highly unlikely the business will ever recover so we’ll write a few thoughts on the situation. I only ask that we please leave any personal jabs out of the comments and keep the discussion centered on the issues.
Contents
History
Just a bit of background, TPM began like 2-3 years ago, one of many secondary gift card buyers, with a focus on the miles-points community. Over time, we’ve heard a few instances where they were bouncing checks, but overall a lot of people had good experiences with them, and many even met the owner in person at various miles-and-points meetups.
Around two weeks ago, tons of reports came in about checks bouncing. People called up the issuing bank and verified there were no funds to cover even a small check.
Someone from TPM sent out an advisory email a couple of weeks ago indicating an internal issue and asking for some patience. Since then they haven’t following up with more info.
I’m sure the TPM team are good people, but they either don’t have the authority to make decisions in a situation like this, they aren’t sure what to do, or they have legal reasons (bankruptcy-type) why they can’t finalize anything right now and thus don’t have more information to add.
Either way, it leaves a lot of people with a lot of money on the line here, even tens of thousands of dollars for some people.
Why did TPM go under?
Yeah, why are they going under to begin with? Were they selling at a loss? What happened now?
It’s probably one of the following reasons (likely a combination of these):
- Taking on too much inventory with float they didn’t have. (I’m sure this was part of the issue – float is an issue for every small retail business.)
- Mismanagement in their margins or overhead expenses. (I’m pretty involved in gift card selling myself, and it’s hard for me to see how they could not have been profiting nice margins, on average, on their gift cards sales. But maybe it wasn’t enough to cover overhead, particularly all the salaries.)
- Fraudulent cards. (My experience has been that if you’re on top of your game you can keep losses here to a minimum, but it’s a real time suck to go through each card and figure it out. It takes a lot of meticulousness and perseverance. It’s possible this was a contributing factor.)
- One of their buyers defaulted and left TPM holding the bag. (I have no idea if this happened or not, but if it did happen with a major buyer, the picture makes a whole lot more sense.)
What to do now?
IMPORTANT: I am not a lawyer and this paragraph does not represent any sort of legal advice. Just some thoughts.
You probably already figured out that it’s not worth cashing the check since there’s no money in their account to cover your check. You’ll just be left with a fee from your bank.
Some people had the idea of cashing out the gift cards they sold to TPM. They reason that since they were never paid for the cards, TPM didn’t uphold their side of the agreement on the sale, thus effectively voiding the sale and leaving the original owner with the right to use the cards. As an example, someone who sold $5,000 of Amazon gift cards to TPM can simply redeem those cards into their Amazon account. Not all retailers are as simple as that, but some do have similar ‘wash’ options. You can also try asking the retailer to reissue the gift card with a new number. Or you can simply spend down the card on the website.
This line-of-thought seems reasonable enough, especially on cards which were never yet sold by TPM. There isn’t really any good way to know if a card was or wasn’t sold other than just testing the balance and hoping that if there’s a balance that means it wasn’t sold (obviously that’s not clear proof).
What if your cards can’t be used up electronically or if your card’s balance has already been depleted?
Some people came up with another idea: why not go through all your gift card sales to TPM over the past few years and redeem any unused gift cards. Obviously this is a nightmare for all of TPMs buyers, but maybe you have the right to do so?
To me this seems to be pushing the boundaries a bit.
An analogy might be if I sold a bunch of iPads to Jack and Jack’s payment never came through. It seems reasonable enough to take the iPads back from Jack if there was a way for me to do so. Maybe an argument can be made to allow my taking other things in Jack’s inventory as payment (though that would probably need a legal process). But it doesn’t seem reasonable to grab an iPad out of the hands of someone who bought it from Jack.
Again, I’m no lawyer, just thinking out loud.
Can we dispute the charge with the credit card?
I can’t see any room for a disputed charge here. If you bought an iPhone, sold it on Craig’s List, and somehow got scammed, you wouldn’t be able to do a chargeback on the iPhone. There is Purchase Protection which covers theft and sometimes loss, but commerce almost certainly would not be included in that, plus gift cards are almost certainly excluded from that benefit.
Will we get our money back?
The biggest question for all sellers who are waiting for payment is whether they’ll ever get that payment. Maybe I’m an optimist, but I tend to think people could eventually see payment on some or all of what’s owed them.
This really depends heavily on something discussed earlier: why are they going under to begin with? If it’s due to some sort of mismanagement, it’s hard to believe they won’t be able to sell through their inventory and recover most of the what’s owed. On the other hand, if there was a buyer of theirs who defaulted on a huge payment, that could be a much bigger issue…
If they officially go bankrupt, I’m not even going to speculate how that will play out. Far as I know, TPM does not operate under any sort of corporate entity. Regardless, I don’t know bankruptcy law, but again, assuming there is money there, hopefully people will get at least a large percentage of what’s owed.
Going Forward
Due to the erratic nature of what people are doing with cards sold to TPM, added to the huge trust gap that comes from a debacle like this, it appears unlikely the TPM business will ever recover. That’s sad for the business, for all users, and especially for someone who may end up losing money on it.
It’s a reminder of the risks inherent in the ‘game’. I often consider the fact that one lost $500 Visa gift card could wipe out weeks worth of gains. It’s a sobering thought.
Going forward, if you’re still in the gift card selling game, it’s best to use sellers who pay quickly since there’s less time for something to wrong. Quicker payments also makes it easier to keep smaller amounts floating at any given time. And obviously dealing with someone you trust is the biggest advantage.
Maybe you have a friend who has good bulk relationships and would be interested in buying your cards. Try to think around and network a bit to see what your best option is.
In a sense, selling on a marketplace like Raise has the advantage that they aren’t floating any funds and thus, theoretically, there’s no way for you to lose money there. If they go under for some reason, your unsold cards will still be yours to use or sell elsewhere. That said, I’ve always wondered what would happen if there was a data breach at Raise. Who picks up the tab? It might be possible to work with stores to cancel the old gift cards and get replacements, but it could get messy.
We wrote some more on best practices for selling gift cards in the post: Gift Card Reselling in 2018 and Beyond.
I’ve been using The Gift Card Broker for a while now. The rates aren’t as good as some on TPM, but they pay through ACH and haven’t had any issues yet. They seem to answer any emails as well.
My account was closed by TPM in first week of Jan 2018, when I was waiting for my check of $3500. They didn’t release my check as it seemed to me since after lot of back and forth I received my payment check through tracking no. but I never received the check which they claimed they sent it through normal post. Looks like, that closure from their side saved me some good amount of money.
I filed a complaint with the Federal Trade Commission (FTC). The more reports they get of being scammed on gift cards the more likely TPM will be investigated by the FTC. It was an easy report to make over the phone.
1-877-382-4357
You can also file online, FTC.gov.
how do I know if my gift card is from TPM? what I mean is I buy lot’s of gift cards for minimum spend and save it for later, usually from PPDG or My Gift Cards Plus, is it possible any of those bought from TPM and my funds will be depleted? Thanks!
No, those are first hand gift cards. TPM deals with giftcards purchased from those sources and then resells them.
TPM = Enron
Raise = Arthur Andersen
There is something extremely odd about the fact that people on this board (maybe Raise employees?) are telling sellers to do nothing, while Raise continues to sell the gift cards for which those sellers have not been paid.
Why is Raise being singled out here?
Read the comment above yours. Raise has declined to comment why they continue to sell these gift cards and doesn’t care. They simply don’t care and are turning their head the other way, just like Arthur Andersen did with Enron. They know tons of the cards are drained or were obtained fraudulently yet only care about selling them so they can take their cut and have less of a tab to TPM.
Raise isn’t the only institutional buyer who buys from TPM. I personally received a call from another buyer who was contacting sellers to get a feel for what next moves sellers would make.
I’m not entirely sure why Raise is being singled out. From what I understand, they were a relatively small outlet for TPM’s business.
It’s because these people have no clue. “Other gc intermediaries sold to Raise so TPM must too!” The site that TPM actually sells to DID pull a huge amount of their gc inventory, probably worried about sellers redeeming sold gcs.
I’m guessing this is the company who called me…
Great post about liquidating cards already processed and paid for. You’re very likely to get into a very ugly situation there if you did this. As for processed unpaid same sort of situation although “not as bad.” I was out a few K but the good thing here is my attorney family member has said if they try to essentially go steal back from me. She’ll will make sure whoever it is will enough in legal fees after appeal and appeal again for karma to net zero. Said the first order of business would be to inform the other attorney of this plan too!
thats why i only sell to cardcash.com, they pay you right away, not when your gift card sells, so if they go under, its totally there loss, no risk involved (do not work for cardcash, just a very happy costumer )
A. There are plenty of buyers who will pay you upfront in exchange for a lower rate, nothing special about cardcash.
B. You are not their customer if you sell them gift cards. They are your customer. People need to lose this idea that consumer protections will help them if a customer of theirs doesn’t play them.
Why has Raise continued to sell cards from TPM for the past two weeks? Everyone seems to be blaming sellers for wanting to recoup some of their funds but what about Raise? They could have immediately delisted everything from TPM when they first learned about the issues but did not. That is basically theft from TPM sellers.
I called Raise today about that and they said they don’t have any comment about it.
Very fishy. So Raise is basically making money off a company that is no longer in business, knowing that the sellers who sold the cards to TPM will not be paid. If Raise can sue sellers, as some people on here seem to believe, then I see no reason that sellers cannot sue Raise for this conduct. Who is Raise even paying for these sales?
Maybe you should not give legal advice online as you clearly have no idea what you are talking about. Raise has no legal obligation to do anything to help make their supplier’s supplier whole. Raise will continue to pay TPM, as they are legally obligated to do and a bankruptcy judge will determine which of TPM’s supplier get TPM’s remaining assets. Don’t start a reselling business unless you understand the basics of business law.
Are you that naive or just pretending?
He owes me money from a June 4th check that was never mailed. My codes I submitted to them have been redeemed by them. That’s theft.
I don’t get the people that are afraid to use their codes that they submitted and that are yet unredeemed. I would personally use those, not sell them to another company. Personally using them would be better than letting him use them with no payment rendered. That to me, is not a breach of contract. Who would ever want to work with this guy again, even if he does come back and pay everyone everything he owes, which is not happening anyways?
I would guess the concern is that if the cards were sold by TPM or another merchant, you would be committing fraud by then draining the card. Even if you were never paid by TPM, the law might say that you “sold” them the cards and then took the money from those cards. IANAL, but that seems like the biggest risk.
Homer, in that case, the contract says that TPM can pursue payment from us for the “bad” cards. The notion that we have any duty to some unknown entity that TPM sold to seems misplaced to me. We don’t even know what TPM did with the cards we sold to him (he could have kept them for personal use). But I am not a lawyer.
He has to be committing a crime as well, right?
It’s not a crime not to pay a debt. It is a civil matter. Debtors prison hasn’t been a thing for a couple of centuries.
There are some situations in which ‘debtors prisons’ have been brought back in present-day, very controversially, but I don’t think this would be one of those situations. The main uses of it that I’ve heard about are with government fines (such as traffic tickets) and rent-to-own furnishings.
Stop giving legal advice online then, you have no idea what you are talking about and could get people in real trouble.
So Raise is presumably still making money selling cards from TPM. Where is that money going right now?
And if Raise really had such a close relationship with Mike, what did Raise do to ensure that Mike was a legitimate businessperson? Was Raise part of a fraudulent scheme? Why is Raise getting sellers’ contact info, as someone suggested, if Raise is doing business with Mike and not the sellers? Raise made the decision to do business with Mike rather than dealing with sellers directly. If Raise makes the decision to sue any seller, I hope someone is able to do battle with Raise and uncover all evidence about what was going on here.